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Unformatted text preview: What is the company’s current stock value? If Do = $2.00, g (which is constant)= 6%, P0 =$40, what is the stock’s expected dividend yield for the coming year? You must estimate the intrinsic value of ABC stock. ABC’s end of the year cash flow (FCF) is expected to be $25 million and it is expected to grow at a constant rate of 8.5% a year thereafter. The company’s WACC is 11%. ABC has $200 million of long-term debt plus preferred stock and there are 30 million shares of common stock outstanding. What is the estimated intrinsic value per share of the firm’s common stock....
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- Fall '08
- Current Stock Value, constant growth rate